What’s Happening to Folkestone Education Trust’s Share Price?

What does Folkestone Education do?

Folkestone Education Trust [ASX:FET] is a listed property trust. They have about 400 properties around Australia; primarily they act as a landlord in the childcare early learning sector.

They acquire, develop and lease childcare centres to operators, collecting the rent. The company sees significant room to add more centres, and are building new centres across Melbourne, Sydney and Perth.

What’s happening to drive the share price?

A couple of factors; one is population growth. The company is expecting to see 500,000 more children under the age of five in the next 15 years.

The other factor is the increase of female participation rates in the workforce. It’s a necessity for parents to have dual incomes to pay for the cost of living today. The days of mum staying home while dad went off to work are long gone.

The other positive for the company in being a landlord is the appreciation in the underlying land values because of continuing population growth and improvements in infrastructure. There’s versatility in the land that the centres sit on, if they’re not going to be a centre in 10 or 20 years’ time, there’s certainly redevelopment potential.

Half-year results were positive, about a 13% increase in profit, together with a 5.5% increase in distributions.

What now for Folkestone Education Trust?

Childcare is a growth area, and one that’s strongly supported and subsidised by government. That’s all very positive for rents.

Many analyst suggests childcare is a better asset than, say, retail, industrial, or office property.

That’s all backed up by a new Colliers International report, which suggests the childcare sector is on track for a record year of investment.

The outlook looks positive for this company, further backed up by the chart of the company share price. One to watch and follow.

Terence Duffy,
Cycles, Trends and Forecasts

Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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